Bakken Shale News

Beginning April 1st, Halliburton will no longer have a presence in Minot, North Dakota. A spokesperson confirmed Tuesday that the company will suspend operations and close the facility, transferring employees to their Williston and Dickinson locations.

This is the latest in a string of announcements from Halliburton about their efforts to streamline operations in the face of the current crude pricing downturn. Earlier this year the company reported worldwide layoffs of 6,500 people followed by an announcement that they would close their facility in Regina, Saskatchewan in March.

Spokesperson Susie McMichae said that “The company continue to make adjustments to its workforce based on current business conditions. We value every employee we have, but unfortunately we are faced with the difficult reality that reductions are necessary to worth through this challenging market environment,” said McMichael.

Continental Resources strengthened its position in North Dakota by winning the right to drill on an additional 160 acres located near the Fort Berthold Indian Reservation.

Continental’s Harold Hamm spent 2.3 million for the privilege at a state land auction last Friday, beating out the competition in the last 30 seconds of bidding. The funds from this sale are earmarked for educational uses around the state.

Even as Continental announced it would slash its budget by 48%, CEO Harold Hamm remained publicly optimistic about his company’s ability to navigate the rough waters.

Hamm commented that “We concluded 2014 with a strong fourth quarter performance, capping off another year of exceptional production and proved reserves growth (…) We believe that our momentum coming out of 2014 will allow us to grow our production 16% to 20% this year”

The Bakken continues to be the backbone of Continental’s operations. The company is the largest acreage holder in the Bakken and the second largest oil producer in the region. In February, Continental announced that Bakken production was up 30% over last year and overall output was expected to jump 20% for 2015.

Working in the oil fields may be lucrative these days, but it is also one of the most dangerous jobs in the country.

According to OSHA, 34 North Dakota workers in the oil and gas and construction industries have died because of work-related injuries since 2012. Eight of these fatalities have happened since October, marking a sharp increase and leading some to speculate that the pricing downturn is making an already dangerous job even worse.

In July, the U.S. Department of Labor’s OSHA launched an enforcement program to prevent injuries and fatalities in North Dakota’s high-hazard industries. Since then, crude prices have plummeted, causing some to believe there is a connection between a rough pricing environment and more dangerous work conditions.

Eric Brooks, OSHA’s area director in Bismarck told the Wall Street Journal, “These are the kinds of incidents that we haven’t seen in a while. With the drop in oil prices, companies may be looking to protect the profit margin by hiring contractors that are not experienced,” he said.

In order to survive the downturn, producers are forced to make tough decisions that may contribute to unsafe conditions in an industry known for 12-hour work shifts, rampant turnover and long stretches without time off.

Since the Bakken boom in 2008, thousands have flocked to North Dakota from all over the country in search of better opportunities and they have not been disappointed. The state boasts the lowest unemployment in the country and all sectors have seen wage increases including upwards of $100,000 for truckers and store clerks who can earn double the minimum wage. But the highest paid work in the oil fields definitely come with greater risk.

“These industries are inherently dangerous, and workers are exposed to multiple hazards every day. Their safety must not be compromised because demand for production keeps increasing,” said Eric Brooks. “Workers are coming to these growing industries to find jobs, not catastrophic injury and preventable death. These employers have a legal responsibility to protect every employee that works for them.”

After a four-year process that included over 1.5 million public comments, the Bureau of Land Management (BLM) finalized new rules on Friday to regulate hydraulic oil and gas fracturing on public lands.

Since 2007, there has been a steady increase in the use of hydraulic fracturing, but the rules to oversee the practice had not been updated in three decades. The BLM began its work to update existing rules in 2010 after growing public concern amidst the shale oil boom that expanded the use of hydraulic fracturing, the technology that extracts oil from the rock.

Secretary of the Interior Sally Jewell said that “Current federal well-drilling regulations are more than 30 years old and they simply have not kept pace with the technical complexities of today’s hydraulic fracturing operations. This updated and strengthened rule provides a framework of safeguards and disclosure protocols that will allow for the continued responsible development of our federal oil and gas resources. As we continue to offer millions of acres of public lands for conventional and renewable energy production, it is absolutely critical the public have confidence that transparent and effective safety and environmental protections are in place.”

The rules go into effect in 90 days and require the following:

A validation of well integrity in order to protect groundwater supplies

Companies to publicly disclose chemicals used in hydraulic fracturing through the website FracFocus, within 30 days of completing fracturing operations

Higher standards for interim storage of recovered waste fluids from hydraulic fracturing to mitigate risks to air, water and wildlife

Companies to submit more detailed information before fracking to reduce the risk of cross-well contamination

This ruling only applies to development on public and tribal lands and could potentially impact more than 90,000 oil and gas wells and set a precedent for future regulations.

Response to the ruling has been swift, with environment groups applauding this as a necessary first step towards protecting our public lands. But the backlash from the energy industry was just as quick with Independent Petroleum Association of America already filing a lawsuit that challenges the regulation.

In recent Bakken news, a study reveals that Williston, N.D. is experiencing population growth that is ten times the normal rate. Infrastructure maintenance and improvements are a growing concern throughout the state as growing populations and oil equipment demands have taxed the current roadways and services.

The U.S. rig count fell another 56 to 1069 rigs running as of today. A total of 242 rigs were targeting natural gas (down 15 from the previous week) and 825 were targeting oil in the U.S. (41 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)99 rigs are running in the Williston Basin across MT, ND, and SD. 96 are in ND alone.

Bakken Oil & Gas Rigs

The number of oil rigs decreased by five t0 97 rigs running by midday. WTI oil prices increased $.91 from the previous week, trading at $45.72/bbl on Friday afternoon. The WTI-Brent saw an increase of $.47 by week’s end, landing at $55.14. There are currently no natural active gas rigs in the area and futures are trading at $2.79/mmbtu by midday.

McKenzie County continues to lead development and increased to 43 rigs running. Williams (18) and Mountrail (17) counties are the next closest producers. View the full list below under the Bakken Drilling by County section.

Bakken Oil & Gas Rigs

What is the Rig Count?

The Bakken Shale Rig Count is an index of the total number of oil & gas drilling rigs running across Montana and North Dakota. The rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Bakken formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

During a recent event dubbed “Energy Day” in Bismark, N.D. various groups came together to recognize the impact of the oil and gas industry. The day included legislative committee hearings, an education session and facts and figures regarding the industry’s importance to North Dakota’s economy.

According to one study, presented by Dean Bangsund of ND University, oil and gas had a $43 billion economic impact on North Dakota in 2013 and affected many parts of the aspects of the state’s economy. Highlights include:

Retail trade saw the largest impact, accounting for $11.3 billion of the total.

Personal income saw the second-largest impact at $9.3 billion.

The finance, insurance and real estate industry ($4.5 billion) overtook the government

$4.4 billion in government revenues

Researcher Dean Bangsund told Bakken Magazine “This study helps confirm that the petroleum industry is one of the largest basic-sector industries in North Dakota. Although activity is concentrated in the western part of the state, the magnitude of the contributions to both the state and local governments and the sheer volume of secondary economic effects in nearly all sectors of the North Dakota economy would suggest that the economic effects of the industry are felt statewide.”

With unstable pricing environment, the future is unknown. Most economic indicators remain strong, though unemployment ticked up slightly in January and Bangsund believes that North Dakota will continue to reap positive benefits from the oil and gas industry for some time.

During an interview at a recent Forbes event, Hamm claims that Russians have worked with environmental groups and financed the anti-fracking movement in hopes of producing panic in the United States.

Hamm of course has a vested interest in the anti-fracking movement. He was a pioneer in the use of horizontal drilling and hydraulic fracturing to extract soil from shale. and has been instrumental in the development of the Bakken shale formation which has sparked a hge oil boom. It is expected that the Bakken will produce more than 1.3 million barrels of oil this year, according to the U.S. Energy Information Agency.

This isn’t the first time such accusations against Russia have been made. In June of 2014, NATO chief, Anders Fogh Rasmussen, said Russia was mounting a sophisticated campaign to undermine the development of alternative energy sources such as shale oil. According to Rasmussen, Russia wants to secure Europe’s dependence on energy imports from Moscow.

Rasmussen stated, “I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations – environmental organisations working against shale gas – to maintain European dependence on imported Russian gas. That is my interpretation.

No one is talking openly about a possible deal including Whiting, who has not given any official statement about their intentions. All information has come from anonymous sources and people who are speculating about what the company may do.

Bloomberg quotes Phillip Jungwirth, an analyst with Bank of Montreal, who says that “Whiting is probably exploring a sale along with other strategic alternatives, including selling assets, raising debt and selling shares in order to address investor liquidity concerns.”

Some believe that a full sale is unlikely due to the Whiting’s heavy debt and that it is more probably that the company will sell off large pieces instead.

In early March, Whiting released its 2014 earning results with CEO James J. Volker boasting a strong year with record production and a string 2015 growth plan. A week later, rumors started to surface the Whiting was looking around for other opportunities.

Whiting was founded in 1980 and became the largest Bakken/Three Forks producer in the Williston Basin after its acquisition of Kodiak Oil & Gas in June of last year.

Williston, N.D., a city at the heart of the Bakken oil region, is experiencing population growth that is ten times the normal rate, according to a recent study commissioned by the city.

In order to determine how many people use its infrastructure and to project future needs, the city turned to Nancy Hodur, a researcher from North Dakota State University.

Hodur began the study in 2012 with the goal to project numbers through 2014. To accomplish this, she began with census data and then added the numbers from people living in hotels, crew camps, RV parks and other conditional use permitted housing. Hodur’s 2012 projections have held up well, with recent estimates indicating they are all within a 5 percent margin of error.

“We did pretty well,” Hodur said. “That bodes very well and reinforces that if we do the hard work to dig out the primary data from the planning department, the city and the county, we can get a good handle on how many bodies — how many noses — are in the Williston area.”

Between 2012 and 2014, Williston service population grew 20 percent from 25,915 to 31,143 and Williams County increased 19 percent from 44,308 to 52,778. This huge increase and far above average numbers of around 2 percent.

So far the city has been able to keep up with the increased service demands, but just barely. Public Works Director David Tuan said the wastewater plant is running at 2.5 million gallons a day in order to keep up with a demand of 2.4 million.

Infrastructure maintenance and improvements are a growing concern throughout the state as growing populations and oil equipment demands have taxed the current roadways and services.

Last month, Governor Dalrymple signed legislation that grants massive emergency funding to counties and cities statewide in order to bolster the lagging infrastructure. Williston will receive approximately $64 million of those dollars for improvements.

The shale oil boom in North Dakota has been a major force in the United States and has revolutionized the state economy, which now boasts the lowest unemployment rate in the country and a billion dollar budget surplus.

Since 2006, the oil boom has been credited with many things including the revolutionary use of new technology, stabilizing the U.S. economy, contributing to the worldwide surplus of crude and creating a new crop of millionaires.

And now…North Dakota oil has inspired television.

ABC Studios announced on Monday that it has cast Don Johnson for the leading role in its new project Boom, which tells the story of a young couple that moves to the Bakken in search of a better life. Johnson, best known for starring in the 80’s cop drama, Miami Vice, will also serve as the executive producer.

According to Variety, the drama is “set in a modern-day “Wild West,” the potential series tracks the pilgrimage of a young, ambitious couple, seeking a better life, to the oil fields of the Bakken, where they come across roughnecks, grifters, oil barons, criminals and fellow prospectors.”

Other actors cast in the project include Scott Michael Foster Rebecca Rittenhouse and India De Beaufort.

This isn’t the first time the small screen has tackled the subject. Reality television has made several attempts to capture the experience of the oil patch including Black Gold (truTV) , Bayou Billionaires (CMT) and Discovery Channel’s Backyard Oil.